As trucking fatalities rise, whistleblowers and other industry activists allege that trucking regulations are not working and the regulators are failing drivers. Andrew Gardiner with the story.

Deaths involving large trucks constitute 27% of all road fatalities in Australia, according to the latest report (June 2024) from the Department of Infrastructure, an increase from last year of 3.5% (12 deaths). Trucking industry whistleblowers claim regulators must take some of the blame.

Veteran truckie and Victorian beef cattle grazier ‘Witness 20’ (as they called him at the 2019 Senate’s Road Transport Inquiry) thought he was on to something when he made his road safety pitch to the Senate. He was alarmed at the number of what he called ‘up at the front’ suspensions and shoddy tyre installations – poorly placed and dangerous, but entirely legal – which could potentially cost lives.

“Trucks were rougher to ride and had much less driver road feel, which was especially alarming when cornering quickly or driving close to the verge,” said Witness 20, referring to road tests of ‘up at the front’ suspension set-ups in which air bag modules were high at the front end. “It wasn’t much of a difference (in height), but it was life-threatening when compared to properly configured systems,” he told MWM.

“What was very clear when leaning into a corner was the sideways rotation of the trailer, setting up a chain reaction that could be deadly.” He added:

Official trials were needed to confirm this, laws, regulations and their enforcement needed to change, and trucking companies had to toe the line.

However, after sympathetic hearings at the Senate inquiry and with state-based authorities like VicRoads (all of which seemed keen to move forward on his proposal). Witness 20 says he “hit a brick wall” in the form of the National Heavy Vehicle Regulator (NHVR) and the National Transport Insurance (NTI) group. “I had teleconference meetings with NHVR, and they brought in an expert from New Zealand, but all of a sudden, he declared ‘case closed’.”

Senate inquiry to nowhere

“Nothing’s happened in the five years since, save for a taxpayer-funded NTI study focusing on milk tankers, called ‘spilt milk’. They concluded the instability was caused by liquid loads sloshing around, but I’ve seen instability when trucks had a solid, stationary load, and it’s clearly a suspension issue,” according to Witness 20.

“Something happened after that first (NHVR) meeting, and I’m left wondering who gained from all the inaction,” Witness 20 concluded. There are three main manufacturers of suspension kits – BPW, Hendrickson’s and Kenworth Trucks – serving the Australian market.

Witness 20’s grievances and those of whistleblowers like Roxanne Mysko share common themes of lethargy, stonewalling and cosiness with trucking companies, insurers and manufacturers. “It seems like our regulators only spring into action on the part of truckies when there’s a death involved,” Roxanne said.

You’ve got to wonder why they’re there sometimes.

As trucking fatalities rise, the whistleblower finds herself under arrest 

Criticism of NHVR

Criticism of NHVR, its funding and the powers at its disposal comes from many quarters. Trucking executive Ryan Howison from DSE Transport sees the aftermath of a deadly 2020 trucking accident in Melbourne’s east as illustrative of broader problems.

“NHVR laid charges against Connect Logistics in September 2021 (resulting in an unprecedented $2.31 million in fines) following an in-depth investigation by Victoria Police’s Taskforce Paragon, after a heavy vehicle tragically struck and claimed the lives of four police officers” who were booking a motorist, Howison wrote in transport newsletter Big Rigs. “The evidence established Connect Logistics had been breaching laws for ages – and it took the death of four police officers for this to finally come to light,” he pointed out (emphasis added).

In June, MWM published independently sourced claims of systematic safety violations at Port Adelaide-based Express Cargo Services (ECS). While MWM is not suggesting NHVR or ECS have acted unethically by violating or failing to enforce workplace or transport safety regulations, we note the contrast between the speed and dedication of NHVR’s response to a high-profile tragedy in which police died, and – according to sources – the regulator failing to take any meaningful action when two separate individuals associated with the trucking industry, Roxanne Mysko and Witness 20, came forward on their own and without the benefit of large-scale publicity.

Trucking deaths on the rise but safety whistleblower ignored then prosecuted

Howison believes that in its current form, NHVR has three major flaws:

• It rarely, if ever, shows up at a trucking company’s yard unannounced and cedes a lot of the enforcement work one might expect of it to police forces, state road authorities and state-based work health and safety authorities – with many of the latter stretched for resources as it is; 
• It “cannot have heavy vehicle inspection stations everywhere” and: 
• It “cannot enforce the way a company instils a safety culture within its workforce.”

His suggested solutions include stronger enforcement and inspection powers, the ability to elect or appoint “Heavy Vehicle Representatives” with the power to trigger an NHVR investigation for failure to comply with regulations, and giving drivers and other workers the right to stop work (without retaliation) if what they’re being told to do is not safe.

Many of these issues go to the resources available to NHVR, while others speak to a need for more regulatory powers. Still other claims, as yet unsubstantiated, could point to a preference for investigating higher-profile cases involving deaths and – some claim – a certain cosiness with trucking companies or (in Witness 20’s case) manufacturers.

NHVR and TWU responses

In a statement to MWM, the NHVR insisted it takes every incident involving a heavy vehicle seriously. “Whether the case is ‘high or low-profile’, we are committed to investigating every incident thoroughly,” the regulator’s Jesse St Ledger stated.

“While there is no requirement for the NHVR to provide advanced notice of our attendance, there is little advantage to be gained by attending unannounced in (most) circumstances.”

One of the primary issues plaguing road transport is the convoluted Chain of Responsibility (CoR) system. Image from Facebook.

Regulators aside, trucking companies and truckies alike say the laws governing heavy vehicles are themselves in urgent need of overhaul. The Transport Workers Union (TWU) has long raised concerns about a focus on what it calls “symptoms” (like poor and dangerous driving, blamed solely on drivers) over the “proven root causes” of accidents like companies cutting corners on safety (often under financial pressure from giant corporate customers) in violation of Chain of Responsibility (CoR) rules.

As reported by MWM, such corner-cutting has allegedly led to fatigue among drivers, said to have worked up to 26 days straight. The relevant law states drivers must have a 24-hour break every seventh day, but some say the law’s being routinely flouted.

“CoR as originally conceived was supposed to proactively reduce pressure (from big businesses at the buyer’s end of the supply chain) that lead to corners being cut,” TWU’s Emily Mead told MWM. “In reality, the law (remains) a reactive post-CoR-breach regime that ends up focusing enforcement activity on drivers and some operators.”

Trucking exec Howison agrees on the need for a proactive approach: “Companies can only implement significant structural changes and safety measures after (an accident) has already happened,” he wrote in Big Rigs. This means “preventable accidents can occur” in the meantime.

The ‘it won’t happen to us’ mindset prevails until disaster strikes.

Hopes for safety improvements

Fresh hope for trucking safety emerged last week with the addition of a road transport division to the Fair Work Commission (FWC). The TWU is confident this new body will “set enforceable standards to make the industry safe” as it can set safety standards “that apply to every participant in the supply chain, including retailers, manufacturers and oil companies at the top,” TWU’s Mead told MWM.

“During the first week of this legislation, the TWU submitted the first contract chain application to ensure fair payment terms and prevent financial risk being passed onto operators and drivers on razor-thin margins. With a new system to tackle those root causes, we hope to see NHVR take up the role of monitoring supply chains effectively … and making roads safer,” Mead concluded.

Of course, at this early stage, it’s unlikely such changes will immediately help Witness 20 and his now five-year-old submission on safe suspensions.

“I have to wonder whether improving suspension technology is an established part of the FWC’s purview,” he joked.  “Maybe that’s a reform for another day.”

Editors note: MWM contacted NTI for its position on this story, but had not received a reply by publication time.

This post was originally published on Michael West.

The Department of Foreign Affairs (DFAT) advised Minister Penny Wong in June the situation in Gaza was “catastrophic”, the killing of Zomi Frankcom “outrageous, unacceptable”, “mass graves” around hospitals, and rising starvation and disease. Michael West reports Freedom of Information responses.

As Parliament wound up for its recess a week ago, the usual data dump lobbed on Friday night. Among the disclosures was the response to an FOI request by Rex Patrick about the Government’s advice on Israel’s war on Gaza.

It reads like a litany of war crimes. We have published it below for readers’ consideration. “The impact on civilians has been immense,” DFAT advised Foreign Minister Penny Wong. “The UN reports that as of 13 May 2024, nearly 35,000 Palestinians have been killed and more than 78,000 have been injured. Of Gaza’s 2.3 million people, approximately 1.7 million have been displaced.”

After deliberations with DFAT as to the scope of the request, it was agreed by Rex Patrick to accept just one month of DFAT briefings to the Government, such was the volume of information. And it is ironic that during this period the former Labor senator Fatima Payman broke ranks with her party over Israel’s atrocities in Gaza. On May 24, she publicly broke ranks with Labor in a speech to the Senate accusing Israel of genocide.

On June 17, Payman wrote an article for Al Jazeera English supportive of Australia recognising Palestine. On June 25 she crossed the floor to vote against the Opposition and the Government in favour of Palestinian statehood.

On June 30, she she was suspended indefinitely from Labor caucus.

It seems that Payman, although not privy to the DFAT advice, surely took more decisive action than the Government.

Israel had already violated international law on 28 occasions and this week it dramatically stepped up its illegal campaign in the West Bank, which is not Gaza and which Hamas does not control.

DFAT advice on crisis in Gaza

The FOI material shows the Government condemned the humanitarian situation in Gaza and urged continued humanitarian assistance, yet there was no action, and there still has been no action taken, against the brutal regime of Benjamin Netanyahu despite the genocide case at the International Court of Justice earlier this year (in which Australia declined to participate).

The export of weapons parts to Israel continues, as do normal diplomatic relations, and Pine Gap communications assistance, and Israeli Australians continue to fight with the IDF, although the government has refused to respond to FOIs on this.

Bear in mind that this DFAT advice (published in full below) was for the month of June and things have deteriorated sharply since then in both Gaza and the West Bank. Still, Australia continues to pursue trade with Israel’s biggest weapons maker Elbit Systems while our Future Fund continues to be an investor in Elbit Systems.

Zomi Frankcom and World Central Kitchen

Since the June briefings, the Binskin Report into the death of Australian aid worker Zomi Frankcom has been handed down. The report has been criticised by the family of Frankcom and others for failing to include the audio recordings of the IDF personnel involved in the drone strike – and Israel has not apologised not prosecuted the soldiers involved.

According to the DFAT advice: “The deaths of Ms (Zomi) Frankcom and her six World Central Kitchen colleagues was outrageous, unacceptable and should not have occurred – humanitarian workers in a conflict zone delivering aid must be protected.” 

The advice also says, “At least 2,527 Australian citizens, permanent residents and their families have now left Israel or the Occupied Palestinian Territories – of the registered individuals that have departed 2,186 have returned to Australia (assisted and independently).”

This was in June, prior to the recent outcry by the Opposition about allowing Palestinians visas into Australia.

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Elbit: how Australia helped finance the IDF killing of Zomi Frankcom and the slaughter in Gaza

This post was originally published on Michael West.

Prime Minister Anthony Albanese and a dozen ASIC officials face serious questions following a bungled investigation into the activities of a gold bullion dealer. Kim Wingerei with the story.

Economist John Adams has been a vocal critic of ASIC; one of the principal drivers of Senator Andrew Bragg’s report which recommends the corporate regulator be scotched, or at least broken up. Its failure to conduct investigations into corporate crime and misconduct is Adam’s main concern.

And he cites, in support of his calls for a break-up, a failed investigation into a gold and precious metals dealer. From July 2022 to August 2023, ASIC investigated the directors of ABC Bullion for possible breaches of their corporate director duties following a 608-page report of alleged misconduct lodged with ASIC by Adams.

The report of alleged misconduct was a 10-month pursuit by Adams after an ABC Bullion employee, who would later become a whistleblower, raised serious allegations as to the integrity of ABC Bullion’s physical bullion storage services.

On 10 August 2023, ASIC concluded its 13-month investigation, costing approximately $300,000, by writing to Adams that “ASIC did not find evidence which establishes a contravention of the law.”

Albanese’s endorsement

However, ASIC’s investigation became marred by controversy when Prime Minister Anthony Albanese held a national media conference on 14 October 2022 with representatives from ABC Bullion and its parent company, Pallion Group.

The event resulted in the Prime Minister providing the directors of the corporate group an explicit personal endorsement – which included photographed in front of ABC Bullion logo banner – all of which was later splashed across social media.

The national media conference coincided with the official opening of a purported manufacturing building located at 2 Lilian Fowler Place, Marrickville.

While the Prime Minister’s state of knowledge regarding ASIC’s investigative activities remains unclear, the Albanese media conference raised such significant concerns with Adams that he lodged a formal submission with the then Senate inquiry chaired by Liberal Senator Andrew Bragg that was examining the investigation and enforcement performance of ASIC.

MWM submitted a series of questions to the Prime Minister’s Office asking what the Prime Minister knew at the time of the announcement but has not received a reply. Moreover, the Office of the Prime Minister has earlier refused to release documents on the basis that no joint press conference with Pallion took place (even though everyone else, including the PMO agreed that it took place).

This is the same inquiry that paradoxically Adams helped trigger when he published his own independent analysis of ASIC’s handling of reports of alleged misconduct on 6 October 2022.

Alleged misconduct

Central to Adams’ concern in 2022 were two core issues.

Firstly, the Prime Minister’s explicit public endorsement would improperly influence ASIC’s investigation, which was already in mid-stream.

Secondly, according to Adams, “even if the Prime Minister had no knowledge of ASIC’s investigation, he should have known, given extensive media reporting, that the Australian Taxation Office has been in a long pursuit of the directors of Pallion Group for an array of alleged contraventions.”

Dissatisfied with the conclusions reached by ASIC, Adams began a self-financed critical review of ASIC’s official investigation of ABC Bullion over an eight-month period. 

Via a barrage of freedom of information (FOI) requests and parliamentary questions on notice posed by One Nation Senator Malcolm Roberts, Adams was able to reconstruct a detailed day-by-day chronology of ASIC’s investigation, “uncovering multiple inconsistencies and unusual investigative practices,” according to Adams.

ASIC flawed investigations

First, Adams discovered that ASIC investigators did not conduct any physical inspection of ABC Bullion’s precious metals storage holdings for over 9.5 months from when the investigation first started on 4 July 2022, a delay that provided ample opportunity for critical physical evidence to be altered.

Second, ABC Bullion, after being notified by ASIC it was under investigation on 7 July 2022, was allowed to move an undisclosed quantity of physical bullion within weeks to the same building in which the Prime Minister would hold his national media conference at 2 Lilian Fowler Place, Marrickville.

In an email to an investor, ABC Bullion claimed that this building, commencing in July 2022, was their new storage facility for their premium and secure storage products. The fact that this coincided with the commencement of ASIC’s investigation was purely coincidental.

Third, while ASIC engaged Deloitte Australia to undertake a forensic audit of ABC Bullion’s precious metal holdings across its premium, secure and pool-allocated products, ASIC failed to obtain a search warrant to conduct the audit. Instead, ASIC obtained Pallion Group’s permission to access four physical locations (three in New South Wales and one in Western Australia).

This approach provided ABC Bullion with months of advanced notice to prepare for the audit.

If this wasn’t enough assistance, ASIC also controversially provided ABC Bullion 10-day advanced notice ahead of the first site inspection, which was conducted on Friday, 28 April 2023, in Sydney. An additional six days’ notice was provided prior to the last site inspection, which would later be held on 11 May 2023.

Fourth, a new whistleblower, who at the time of the Deloitte Australia forensic audit was employed by the Pallion Group, has emerged with claims they were personally instructed to transport a significant quantity of physical bullion that was company inventory within the space of 24 hours back to Sydney in late April 2023 prior to the first site inspection.

If such claims of co-mingling and substitution can be substantiated, then it would strongly suggest that the results of the Deloitte Australia forensic audit were heavily manipulated.

Unlawful building activity

Also among these discoveries, the movement of physical bullion by ABC Bullion to 2 Lilian Fowler Place, Marrickville, approximately 3.5 weeks after being notified by ASIC that an investigation had commenced, became an intense point of focus for Adams.

According to Adams, “the building had previously been used as a food processing facility and the building’s current tenants, Pallion Equipment Pty Ltd (another subsidiary company within the Pallion Group) had only lodged a development application to the Inner West Council on 3 June 2022 seeking consent to both change the use of the building and undertake a full-scale redevelopment of the building.”

Adams went on to discover that Pallion Equipment’s development application was only approved by the local council on 23 January 2023, that unauthorised building works had been performed on the building in July and August 2022 without development consent, the appointment of a principal certifying authority or a construction certificate,

and that the building had been occupied without an occupation certificate.

More than two years since ASIC started their investigation into ABC Bullion’s storage services, the Inner West Council has yet to issue an occupation certificate for the building purportedly holding the physical assets, in some cases the life savings, of investors.

In the past week, Michael Ryan, who is the Inner West Council’s Senior Manager of Health and Building, confirmed in a letter to Adams that upon investigation of his claims, 2 Lilian Fowler Place, Marrickville, had indeed been occupied without an occupation certificate and that this constituted “unlawful activity”.

Moreover, Mr Ryan confirmed that “there is sufficient evidence that breaches occurred for Council to undertake successful enforcement activity.”

This formal declaration of unlawful activity by the Inner West Council has significant implications for ABC Bullion, their clients, ASIC and Prime Minister Albanese.

ABC Bullion: altered storage

The directors of ABC Bullion must explain why they dramatically altered the configuration of the company’s storage program 3.5 weeks into an ASIC criminal investigation that resulted in hauling physical bullion from at least one lawfully occupied building to a building that was illegal, says Adams.

“For investors, they must quickly ascertain to what extent has the now confirmed unlawful activity been communicated to ABC Bullion’s and Pallion Equipment’s insurers, given federal statutory duties of the utmost good faith and disclosure and whether the insurers have a legal basis to void all insurance contracts relating to the Marrickville building.”

Investors also need to ascertain what other legal and financial ramifications flow from the confirmed unlawful activity.

Has ASIC skirted its responsibilities?

ASIC must answer the question as to how it gave ABC Bullion, a company with established ties with the Prime Minister, a clean bill of health while unlawful activity was occurring under its very nose.

This question is particularly relevant to Deputy Chair Sarah Court, who, on several occasions over the past 12 months, sought to reassure Federal Parliament that ASIC’s investigation was both “extensive” and conducted “with the utmost seriousness”.

“Lastly, for the Prime Minister, did he know that he was officially opening an unlawfully occupied building during a criminal investigation under his government, and did his public intervention have any direct or indirect influence on the investigative methodology and outcome of ASIC’s investigation?” Adams asks.

NACC submission

Given ASIC’s well-documented track record of secrecy and obfuscation, as noted by the recent Senate inquiry, the only entity that can get to the bottom of ASIC’s bungled investigation and whether any improper political influence played a role in ASIC allowing unlawful activity to go unchecked, is the National Anti-Corruption Commission (NACC).

Will they bust up ASIC? | The West Report

For this reason, Adams submitted his new 206-page Critical Review Report on 31 May 2024 to the NACC, which remains under assessment some 80 days later.

John Adams contends, “Given the plausible possibility of improper political influence over an ASIC investigation amidst easily identifiable unlawful activity central to allegations emanating from a former employee turned whistleblower, we may expect the Prime Minister of Australia and senior ASIC officials to be under investigation for possible corruption very shortly.”

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ASIC v ASX? Corporate regulator sues stock exchange. What’s the scam?

This post was originally published on Michael West.

Snowy Hydro 2.0 keeps being delayed and keeps costing taxpayers more money. Yet, finding out how much and what the billions are being spent on is difficult. Rex Patrick on his fight for information.

Last financial year the Australian Government spent $100 billion of taxpayers’ money buying and building stuff. But Ministers and bureaucrats don’t like scrutiny of how that money’s spent. My fight to get access to Snowy 2.0 project performance information, evidence and argument has exposed how the Government puts a secrecy shroud over all major projects.

The refusal of the Australian Government to disclose project performance reports for the troubled Snowy 2.0 project can only be offensive to the average Australian.

Snowy Hydro Limited, the builder of Snowy 2.0, is a 100% Commonwealth-owned corporation. Snowy 2.0 is being funded by a $4B taxpayer equity injection, a further $4.5B taxpayer loan and from Snowy Hydro’s dividends that would otherwise be paid to Treasury. Summary – you’re paying for it, all of it.

And yet, as the project has gone from $2B to $6B and now to $12B, a secrecy blanket has been pulled across the project.

Dear Ministers – why do costs and timelines for Snowy 2.0 keep shifting yet are so readily approved?

It’s a secrecy blanket supported by its shareholder ministers, Finance Minister Katy Gallagher and Climate Change and Energy Minister Chris Bowen, the Department of Climate Change, Energy, the Environment and Water (DCCEEW – the Department that oversees the Corporation) and Snowy Hydro itself.

I can say they’re all opposed to transparency and scrutiny because they were all parties in the Administrative Appeals Tribunal (AAT) fighting to stop the release of project performance information in response to an MWM Freedom of Information request.

Having just spent three days in a hotly contested AAT hearing, it’s only now I can legally reveal the way in which the Government and Snowy Hydro seek to protect themselves from scrutiny.

A Three-Step Trick

The secrecy blanket is woven through a simple three-step process.

Step One: Agree by way of contract that everything that is communicated between Snowy Hydro and the Government that is marked “confidential” is to be treated as confidential.

Step One (Source: Evidence filed in the AAT by Snowy Hydro Limited)

Step Two: Mark everything “confidential”. It doesn’t matter if the information is actually confidential, as long as it’s marked “confidential”, then everything’s OK.

Step Three: When a member of the public makes an FOI request for information related to project performance, simply claim that the release of the information would constitute a ‘breach of contract’. (Source: Evidence filed in the AAT by the Government)

Boom! Scrutiny killed!

Step Three (Source: Evidence filed in the AAT by the Government)

Under cross-examination, Leonie Horrocks, the head of DCCEEW’s Energy Enablers Branch, admitted that she never pushed back when documents arrived marked as “confidential”. Apparently, in DCEEW’s view, it’s up to the originator (Snowy Hydro) to determine the classification of the material.

I took Ms Horrocks, the FOI decision maker, to a document that was claimed to be confidential and exempt from access.  The document in question was titled “Dennis Barnes Bio” (the new CEO of Snowy Hydro) and asked her how his biography, which is available on the corporation’s website, could be confidential. No answer was forthcoming.

The Tribunal has now adjourned the matter for six weeks, ordering the Government to provide an argument as to why Snowy Hydro should not be considered part of “the Commonwealth”, a classification that would, for legal reasons, kill their opportunity to claim ‘breach of contract’.

Along with other arguments pressed by me in the Tribunal, there is a possibility that the Tribunal will lift the secrecy blanket on Snowy Hydro 2.0.

A Very Small Win

If the Tribunal does open up Snowy 2.0 to scrutiny, it will be a small but significant win.

Last year the Government spent $100B on procurement. $67B of that was on projects that were for more than $20M.

Because these larger projects likely involved tailored contracts, the three-step trick will likely be built into them.

Procurement Value by Financial Year (Source: AusTender)

I say that with some certainty. Earlier this year I lost an access case to documents related to the cancelled $90B Attack Class (French) submarine project. I lost on the same grounds – disclosure of how that taxpayer project he’d been performing would be a breach of contract.

Overriding the Will of Parliament

The Parliament granted all Australians a right of access to Government documents. The FOI Act does provide protections for truly harmful information under two separate business-related exemptions.

The separate ‘breach of confidence’ exemption was never intended for business information (as expressed in the Government’s explanatory notes to the original bill) but has now become the ‘go to’ exemption for any documents related to major projects.

The Parliament wanted scrutiny over these contract activities, but officials have taken the view that they can override the will of the Parliament just by signing a contract that says “everything is confidential”.

Let’s hope the AAT agrees that Snowy Hydro is part of the Commonwealth, but more particularly that the way in which the FOI Act is being used in inconsistent with the terms of the FOI legislation.

Transparency Must Be Restored

It’s ironic that one of the documents that I did unmask in the course of the AAT hearings revealed that government are acutely aware that Snowy 2.0 still has a lot of risk involved (we see they have now had to buy a 4th tunnel boring machine) and transparency was essential. This was stated in a letter from Minister Bowen and Gallagher to the Chair of the Snowy Hydro Board.

29 March 2023 Letter from Minister Bowen and Gallagher to the Snowy Hydro Chair (Source: FOI)

But the letter only commanded transparency between Snowy Hydro and the Minister, not the public at large. And we all know how little Government ministers are inclined to share information with the people that pay their salaries.

29 March 2023 Letter from Minister Bowen and Gallagher to the Snowy Hydro Chair (Source: FOI)

I don’t know how much the AAT proceedings have cost the Government (that means you), but there have been at least 8 lawyers and 2 barristers involved. The fight in the AAT has occurred despite Ministers Bowen and Gallagher criticising the secrecy of the Morrison Government about Snowy 2.0 and promising “to provide full and transparent updates”. When it comes to secrecy, I’m finding it difficult to distinguish between the Morrison and Albanese Governments.

#Tip: The Auditor-General is conducting a review into how a $282K government legal services contract with law firm King & Wood Mallesons grew to $3.53M.👇This email👇 serves as a tip to the Auditor on the sort of thing to look for. #8LawyersVsRex #FOI #GravyTrain #auspol pic.twitter.com/GkQKC0bP24

— Rex Patrick (@MrRexPatrick) June 29, 2024

This post was originally published on Michael West.

Documents reveal the National Anti-Corruption Commissioner Paul Brereton had a conflict of interest and recused himself from proceedings related to the Robodebt scandal. Or did he? Michelle Fahy and Elizabeth Minter investigate.

The decision by the National Anti-Corruption Commission not to investigate the six public servants over the Robodebt scandal appears to have been “infected by the bias of Commissioner Justice Paul Brereton and, if so, should now be disregarded”, says Stephen Charles AO KC, a former judge at the Victorian Court of Appeal and a former board member of the Centre of Public Integrity.

Robodebt Royal Commissioner Catherine Holmes recommended in a sealed section of her final report that the public servants be referred to the NACC for civil action or criminal prosecution.

Documents released under Freedom of Information to Jommy Tee (researcher, writer and MWM contributor) reveal significant mismanagement by Commissioner Brereton of a major conflict of interest underlying the NACC’s decision not to investigate the Robodebt referrals,

raising serious concerns about the viability of Justice Brereton remaining as the NACC’s top official.

The documents show that within three days of the NACC commencing operations, Commissioner Brereton had declared a potential conflict in a top-level meeting because one of the referred individuals was “well-known to him.”

Early drafts of the minutes from the meeting show that Brereton was not going to be involved “in the consideration of the material.” By the final draft, however, the wording was significantly watered down to Brereton not being involved in the “decision-making.”

In a letter to Attorney General Mark Dreyfus the following month, Brereton said he would “recuse myself from decision-making concerning [an undisclosed person].”

RoboDebt Royal Commission: Kathryn Campbell must be first to go

The recusal that wasn’t

Brereton uses the word “recusal” numerous times when explaining his management of his conflict of interest, but the evidence shows he did not undertake an actual “recusal”.

The Oxford English Dictionary defines recusal as “the withdrawal of a judge, prosecutor, or juror from a case on the grounds that they are unqualified to perform legal duties because of a possible conflict of interest or lack of impartiality/” In other words, the person steps away entirely from the matter and has no further involvement.

Stephen Charles states: “When a judge in court proceedings recuses himself because of such a conflict, that judge does not – must not – take any further part in the proceedings; otherwise, any decision by the court is likely to be stained by his involvement and set aside for the judge’s bias.”

In an email on 16 August 2023, Commissioner Brereton wrote that notwithstanding his position of conflict, it is “important and appropriate that I be aware of what is happening.”

Furthermore, at a meeting on 19 October 2023, Commissioner Brereton referred to his previously disclosed conflict relating to [an undisclosed person] and then stated that: “he would not be the decision maker for the matters,” but that he would “make comments as the matter was discussed.”

According to Charles: “The documents show that Commissioner Brereton believed that, notwithstanding his position of conflict, it was ‘important and appropriate’ that he be ‘aware of what is happening’.” Brereton also stated that “it is perfectly normal to receive and read evidence and then not take it into account because it is not admissible, etc.”

Charles continues: “It can be assumed from these comments that Commissioner Brereton believed that since he would not be the ultimate decision-maker, he was entitled to be present during discussions of whether the NACC should receive and act on Commissioner Holmes’s matters and also make comments, thus intervening in the discussion.”

“If this is a correct assessment of the Commissioner’s views and the manner in which NACC made its decision not to act on the Robodebt matters, they are contrary to well-established legal principle and simply cannot be justified.”

NACC’s decision was infected by the Commissioner’s bias and should now be disregarded.

In explaining Brereton’s ongoing involvement, the NACC said that the Commissioner had “a legitimate and important interest in the legal, policy, systems and resourcing issues raised by the Robodebt royal commission referrals.”

“The conflict was managed by delegating responsibility for making the decision to an experienced deputy commissioner, who had no conflict,” the NACC said.

Robodebt Royal Commission

On 7 July 2023, Robodebt Royal Commissioner Catherine Holmes presented her report on Robodebt, which included a sealed chapter that recommended a number of individuals be referred for civil and criminal prosecution.

When announcing its decision on the Robodebt matter, a statement from the NACC on 6 June 2024 revealed that its top official, Commissioner Paul Brereton, had declared a conflict of interest in relation to Robodebt, but the NACC and Brereton refused to provide any details about it.

It is widely accepted that the former head of the Department of Human Services, Kathryn Campbell, who was heavily involved in establishing and implementing the unlawful Robodebt scheme and subject to extensive questioning at the Royal Commission, is one of the six people referred to the NACC.

We have reported on the relationship between Commissioner Brereton and Kathryn Campbell, who served together over many years as senior officers in the Australian Army Reserve, both attaining the rank of major general. Our report included photos of the two together, originally published by independent journalist Shane Dowling.

One reason the NACC gave for not pursuing the matter was because of “the oppression involved in subjecting individuals to repeated investigations.”

The FOI documents confirm that Brereton had a “close association” with one of the six people referred to the NACC, later revealed to be related to his service in the army reserve, and that the person was “well known” to Brereton. These details all point towards the person in question being Kathryn Campbell.

The NACC’s decision on Robodebt is being investigated by NACC inspector Gail Furness.

Robodebt and Robododger: PwC’s consulting operation revealed

Conflict of interest

The documents obtained through FOI show Commissioner Brereton flagged his potential conflict of interest on July 3, three days after the NACC opened for business. Four days later, he formally advised NACC colleagues of his conflict.

Email sent by Paul Brereton, 7 July 2023. Recipient names were redacted by the NACC. (From FOI document 7.)

By 16 August 2023, Commissioner Brereton has decided he should not be the decision maker in any of the Robodebt matters, but believes it is “appropriate” that he be kept abreast of the investigation.

Extract from an email sent by Paul Brereton, 16 August 2023. Recipient name was redacted by the NACC. (From FOI document 10.)

On 19 October 2023, Commissioner Brereton again referred to his conflict of interest but said he would make comments as the matter was discussed.

From the minutes of a NACC Senior Assessment Panel, Thursday 19 October 2023 at which Commissioner Brereton was chair. (From FOI document 16.)

As reported by the ABC and elsewhere, Robodebt was a “massive failure of public administration”, an “extraordinary saga” of “venality, incompetence and cowardice” and a “human tragedy”. Its 500,000-plus victims, and the broader Australian public, had a right to expect that the NACC’s consideration of the matter would be beyond reproach.

The monster that ate hope: Robodebt was a tragedy 40 years in the making

This post was originally published on Michael West.

What will it take to give whistleblowers the kind of protection they deserve. When will women like Roxanne Mysko be saved from “a pile-on by rich white men?” Andrew Gardiner reports.

Australia’s weak whistleblower protection laws claimed another victim on this morning, when Adelaide grandmother and former truck safety compliance officer Roxanne Mysko turned herself into police in Adelaide’s north. That followed an arrest warrant yesterday issued by the South Australian Supreme Court.

Meanwhile, fatalities in crashes involving heavy trucks are up by an average of 6.1 per cent per year over the three years to March 2023, but if Roxanne’s experience is any guide, the unwritten rule appears to be: “don’t talk about it, or else”. 

Roxanne, whose whistleblowing over corner-cutting on safety and driver fatigue and the draconian response from her former employer were the subject of an MWM report in June, failed to appear in the Adelaide Supreme Court on Wednesday. Supporters say this is because she “fears for her life” in prison following alleged threats and harassment of her and her family.

She describes the four years since whistleblowing on Port Adelaide-based Express Cargo Services (ECS) – a company linked with gas giant Santos – as a “living hell” in which she was sacked, sued and on the receiving end of a police raid. 

“Roxanne is terrified, believing people can get at you in prison, but handed herself in at Elizabeth Police Station after she learned the court had issued an arrest warrant,” a supporter, Julie-Ann Finney, told MWM. “When will women like her be saved from a pile-on by rich white men?” 

Keep your trap shut

Roxanne’s legal peril comes after she raised her safety concerns to a partner trucking company of ECS which was “not an eligible recipient” under whistleblower protection laws. After the ensuing ECS civil action, Roxanne complained to that same company – in breach (contempt) of court orders – for, among other things, ‘outing’ her as the informant. 

Her indiscretions seem negligible next to the serious alleged safety breaches at ECS – breaches MWM independently learned of – which Roxanne brought to the attention of the National Heavy Vehicle Regulator (NHVR). These include:  

• Fatigue among company drivers and subcontractors, who are alleged to have worked up to 26 days straight (the relevant law states drivers must have a 24-hour break every seventh day);
• No safety audits of 70 subcontractors from 2007 to 2020, many in violation of Chain of Responsibility (COR) requirements which began in 2014;
• No license checks on 70 subcontractors;
• No vehicle maintenance audits over an extended period;
• Speeding by trucks supposedly limited to 90 km/h, and … 
• No documentation for all COR safety procedures for any truck or freight movement anywhere in Australia.

Such alleged breaches of safety law can be life-threatening to truckies, 188 of whom died – in heavy truck crashes alone – over the 12 months to March last year. If proven, they can incur seven-figure fines, but as things stand, it’s Roxanne who faces $350,000 in ECS legal fees awarded against her, not to mention a possible prison sentence. 

MWM dragged into Supreme Court action

MWM found itself in the middle of Wednesday’s Supreme Court of South Australia to-and-fro, when ECS lawyers argued this publisher may also be in breach of court orders after airing the allegations against ECS in its June article. In response, this reporter repeated our June assertion, contained in the same article, that it had independently learned of and researched the alleged safety breaches at ECS, and had breached no such order. 

In a June email to MWM, David Elix of 1878 lawyers cited court transcripts warning “any other person who knows of this order and does anything that helps (Ms Mysko) to disobey” it may also be imprisoned. Following the article’s publication, Elix sought a retraction, threatening an action for injurious falsehood if MWM did not publish it “within 48 hours.”

MWM did not publish a retraction, offering instead the opportunity for ECS and its lawyers to respond to questions and have their say. We are not suggesting ECS or its partner company have acted unethically or in violation of workplace or transport safety laws, and to reiterate, established the alleged facts around ECS’ safety record and subsequent conduct independently of Ms Mysko. Further, ECS has not responded to questions either prior to or after publication. 

The case of Roxanne Mysko brings into sharp focus the limitations of whistleblower legislation. Not a woman of means, Roxanne needed but couldn’t afford expensive legal advice that would have forestalled her approaching  a “non-eligible recipient” of whistleblower information, thereby avoiding the seemingly-punitive blowback that followed.  

Whistleblowing can cost much more than a lawyer’s bill if you get it wrong. “I don’t laugh anymore, have withdrawn from what was a very social, busy life (and) am now a recluse,” said Roxanne on the emotional toll the last four years have wrought.  

Roxanne is in the early stages of a High Court appeal, but is in no position to privately fund such action. She is on the lookout for pro bono representation.

Trucking deaths on the rise but safety whistleblower ignored then prosecuted

This post was originally published on Michael West.

Take Australian taxpayers’ money, ship it overseas and build groundbreaking capabilities for foreign corporations to export around the world, all at the expense of Australian innovation and jobs. Rex Patrick reports on the quantum betrayal.

On April 30 this year, almost exactly a year after the Albanese Labor Government released its National Quantum Strategy “to grow the quantum industry in Australia,” Industry Minister Ed Husic announced we were shipping just short of a billion taxpayer dollars to a US Company, Palo Alto based PsiQuantum, to build a fault-tolerant quantum computer in Brisbane.

PsiQuantum has never built a quantum computer before—it was in the same place as other companies in the Australian industry. Injecting $1B into a US company so it can get ahead of the competition in an emerging growth market is hardly growing the quantum industry in Australia. It’s quite the opposite. The Government has given a leg up to a foreign corporation, which Australian industry then has to compete against.

It’s a big ‘F’ for the Albanese government – up there with pouring $10B of Australian taxpayers’ money into the US and UK submarine industrial base, giving our gas away for free and allowing foreign criminal enterprises to inflate housing prices with crooked money. I could go on.

AUKUS submarines “nation building” says Admiral. No they’re not, says Rex Patrick

Nothing to see here

If one paid just passing attention to this quantum computing procurement, you might think everything was in order.

The Government announced its National Quantum Strategy in May 2023, released an Expression of Interest in August 2023 for a fault-tolerant quantum computer to be built in Australia, and then, in May the following year, announced the winner: PsiQuantum.

But that’s not what happened. Senate orders for the production of government documents, Senate Estimates questions, and FOI requests have uncovered some disgraceful truths. This includes the FOI’s release to MWM this month.

It turns out the fix was in from the start.

The first interaction between the Australian Government and PsiQuantum appears to have taken place in May 2019, when Austrade met with the American Company. There were some discussions then, but more substantial interaction between the Australian Government and PsiQuantum commenced after the 2022 Federal election.

Prior to December 2022, PsiQuantum submitted an unsolicited proposal to the Government. It impressed the Minister for Science and Industry, Ed Husic, sufficiently to agree to further analysis.

In January 2023, Husic visited the firm’s facilities in Palo Alto, California. The visit brief, released recently under FOI, shows that the Government was already well committed to going with PSI even at that early point.

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For the remaining part of the first half of 2023, some due diligence in relation to PsiQantum was undertaken by the Commonwealth and the Queensland Government.

PsiQuantum binding discussions commenced in June 2023 with the Department of Finance being engaged and with Lawyers from King & Wood Mallesons hired in July 2023 for legal, commercial, probity and technical advice.

Fraud upon Australian industry?

At this point it looked like the Government was simply going to engage in single-sourcing a very significant contract to a foreign corporation. But then the Department set about engaging in a fraud upon Australian industry.

In June 2023, they started drafting the Expression of Interest (EOI)  that was released in August 2023. The Department recently described the EOI’s purpose to the Senate:

“The EOI process tested the international and domestic quantum computing sector’s capability and interest to develop, build and operate a commercial-scale, universal fault-tolerant quantum computer in Australia by 2030 (and preferably earlier), and deliver a range of related benefits to strengthen Australia’s quantum sector and contribute to the national interest.”

Twenty-one companies devoted their time, money and efforts to respond. Many of them no doubt freely imparted their good ideas which will be used by government employees moving forward.

What they did not know was that the Minister and Department had already predetermined the path forward, and they were not to be involved in any significant way.

The EOI was both disingenuous and misleading. It was nothing short of disgraceful conduct.

Contract awarded, competitor born

On 30 April 2024 the Government announced their investment decision that PsiQuantum will establish its Asia-Pacific headquarters in Brisbane.

02 May 2024 Austrade, who is supposed to accelerate the growth of exports and attract foreign investors and stimulate, issued a press release celebrating the contract; the growth on an importer and the expenditure of taxpayer funds.

The Australian Government has injected a billion dollars into a foreign company that will forever compete with the Australian IT industry. It has engaged in a direct betrayal of Australian companies in the sector, tantamount to treason on our high-tech future.

Why did the Albanese Government do this? The decision almost certainly went to the very top of the government. Why did they betray and mislead Australian industry and our national interest? That’s a tale yet to be fully unravelled. It’s unlikely to be a very good story.

Why pay $1m when you can pay PwC $30m, and help yourself to free IP?

This post was originally published on Michael West.

The war of words between Defence Minister Richard Marles and Paul Keating belies how the US bid for military control of Australia has been underway for over a decade, supported by both the Coalition and Labor. Michelle Fahy and Elizabeth Minter explain the Force Posture Agreement.

The Albanese government has not explained the full picture in its rejection of Paul Keating’s concerns about Australia’s defence policy. The former Labor prime minister said on ABC’s 7:30 last Thursday that AUKUS was likely to turn Australia into the 51st state of the United States: “AUKUS is really about, in American terms, the military control of Australia.”

The next morning deputy prime minister Richard Marles claimed Keating’s remarks were “not a fair characterisation” and that Keating’s remarks were not news.

Unmentioned by either Keating or Marles was that America’s bid for military control of Australia has been under way for more than a decade, with the enthusiastic support of both Coalition and Labor governments. As we write this, the US is spending $630 million as part of an extensive militarisation of the Australian Top End to suit its purposes.

Furthermore, five days ago, after the annual Ausmin (Australia-US Ministerial Consultations) talks, it was announced that the US was planning more frequent deployments to Australia of long-range B-52 bombers, which can carry nuclear weapons. 

When asked last year whether Australia would allow US aircraft operating out of Tindal air base in the Northern Territory to carry nuclear weapons, the response of Foreign Minister Penny Wong was simply: “We understand and respect the longstanding US policy of neither confirming or denying.”

Compare that stance with that of Malcolm Fraser’s government. As John Menadue explained in a recent podcast “The Americanisation of our public policy, media and national interest”, then prime minister Fraser stood up in Parliament and insisted that no US aircraft or ships carrying nuclear weapons could access Australian ports or operate over Australia without the permission of the Australian government.

As Menadue said: “This is our territory, this is our sovereignty, [yet today] we won’t even ask the Americans operating out of Tindal whether they’re carrying nuclear weapons.”

Unimpeded access for the US

A critical piece of evidence regarding Australia’s sellout is the little-known Force Posture Agreement (FPA) with the United States, which the Abbott Coalition government signed in 2014, building on agreements made with the US by the Gillard Labor government. Her government allowed up to 2,500 US marines to be stationed on a permanent rotation in Darwin, and increased the number of military aircraft that could fly in and out of the Top End and use Australia’s outback bombing ranges. 

The FPA provides the legal basis for the extensive militarisation of Australia by the US. In short, it permits the US to prepare for, launch and control its own military operations from Australian territory: “United States Forces and United States Contractors shall have unimpeded access to and use of Agreed Facilities and Areas for activities undertaken in connection with this Agreement.”

Defence Minister Marles has been effusive in his support for the force posture agreement and the control the US has been given over Australian soil. 

Just last week, he announced that: “American force posture now in Australia involves every domain: land, sea, air, cyber and space.” Yet the longstanding Outer Space Treaty, which each AUKUS ally has ratified, reserves outer space for purely peaceful purposes. 

Two months after Labor won office in May 2022, Marles was in Washington DC announcing that Labor would “continue the ambitious trajectory of its force posture cooperation” with the US. 

He added that Australia’s military engagement with the US military would “move beyond interoperability to interchangeability” and Australia would “ensure we have all the enablers in place to operate seamlessly together, at speed”.

Latest AUKUS agreement offers ‘escape’ route for US, UK

While the FPA strongly supports America’s ability to wage war against China, politicians have not explained its significance to the Australian public. Moreover, public consultation on the FPA was virtually non-existent. The Northern Territory government was consulted, while other state and territory governments merely received advice about it.

Defence Minister Marles speaks of the “appreciation for the contribution that America is making to the stability and the peace of the Indo-Pacific region by its presence in Australia”, but numerous critics, including Sam Roggeveen, the director of the Lowy Institute’s international security program and a former Australian intelligence analyst, warn of the risks of bringing “US combat forces, and its military strategy to fight China, on to our shores”.

The FPA allows the following and much more:

• unimpeded access to our airfields and airport facilities for US combat aircraft and bombers;
• unimpeded access to our seaports for US naval vessels, including US nuclear submarines at HMAS Stirling in Western Australia;
• the construction of a US Air Force mission planning, intelligence and operations centre in Darwin as part of $630 million in American spending across the Top End over the next two years;
• the establishment, under US military control, of several storage facilities for aircraft fuel, spare parts and munitions, including 11 giant jet fuel storage tanks near Darwin’s main port, which “will allow the US to run large-scale exercises and operations from Northern Australia”.

AUKUS, in conjunction with the FPA, ensures that Australia’s navy, in particular, will be tightly integrated with the US navy for the purpose of fighting China, and that the two navies can operate as one from Australian ports and waters.

Handcuffed to the US

Australia’s high-tech major weapons systems also make us more reliant than ever on the United States. As respected veteran journalist Brian Toohey reported in 2020, “The US … denies Australia access to the computer source code essential to operate key electronic components in its ships, planes, missiles, sensors and so on.” 

This includes the F-35 fighter jets, which both Foreign Minister Penny Wong and Defence Minister Marles have noted this year form the largest proportion of the Australian Air Force’s fast jet capacity.

The significant erosion of Australian sovereignty did not start with AUKUS. Australians were warned as far back as 2001 of the high costs of our dependence on the US by a Parliamentary Library research paper that stated: “It is almost literally true that Australia cannot go to war without the consent and support of the US.”

The paper also noted that the Australian Defence Force is critically dependent on US supply and support for the conduct of all its operations except those at the lowest level and of the shortest duration.

It is more than dependency though? Deputy Prime Minister Richard Marles boasts that “American force posture now in Australia involves every domain: land, sea, air, cyber and space” yet the Albanese government denies that Australia is turning into the 51st state of America.

Studious Ambassador Rudd and his “big careful” AUKUS shipyard cost study

This post was originally published on Michael West.

Against stiff opposition from the Big Business lobby, Parliament is due to vote on the Albanese Government’s multinational tax avoidance reforms this month. Mark Zinsak and Jason Ward deliver their verdict on the reforms.

The Albanese Government came to office promising an ambitious reform agenda to address multinational corporate tax avoidance. It has made progress on some measures but has faced stiff resistance from multinational corporations, tax advisers, lobbyists and political allies. 

An essential reform currently before the Parliament is legislation requiring large multinational corporations to publicly report revenue, profits, taxes paid, number of employees, and assets broken down by the locations where it has a presence for a list of specified tax havens.

Stakeholders will be able to determine if genuine business operations align with where profits are booked and taxes are paid, or not. Corporations that have created artificial structures to dodge paying taxes in Australia – and elsewhere – will be exposed. The government’s legislation will lead the world in increasing multinational corporations’ tax transparency and pave the way for further reforms. 

Country by Country a win

Multinational corporations will be encouraged to report financial data for every country with operations, which is essential for full transparency. For now, mandatory public reporting for all jurisdictions remains an unfinished reform. Large multinational enterprises already report similar information on a confidential basis to OECD tax authorities, including the Australian Taxation Office (ATO), but is not available to civil society, investors, academics, other government bodies or most global tax authorities.

Requiring this information to be made public would greatly increase tax transparency, and public exposure would be a strong incentive for multinational corporations to stop shifting profits offshore. Increased transparency would expose the current scale of profit shifting and inform debates on further reforms needed to close loopholes and increase funding for essential public services.

Punishment by partiality: Lendlease white-collars stick to the right side of the law no matter what

The Government had planned for a more ambitious piece of legislation that would have required the large multinational corporations to publicly report financial details by every jurisdiction in which it has a presence, not just those on a specified list. Yet they were forced to walk back from that ambitious agenda due to threats from other governments that Australia would be punished by being cut off from the OECD system of confidential country-by-country reporting by multinational corporations.

The result would have been a loss of vital intelligence that assists the ATO in addressing tax avoidance by multinational corporations. Thus, the current bill before the Parliament is as far as the Australian Government could go in the current international environment. 

Beneficial ownership – backflip with pike

An area where the current government has failed to make any meaningful progress is a public register of the ultimate owners of corporations, known as “ultimate beneficial owners”.

The Panama Papers have provided a small window into the world in which shell companies with concealed ownership are used as vehicles to facilitate a range of serious human rights violations, from human trafficking, money laundering, financing terrorism, commercial online child sexual abuse, illicit arms trading, corruption and bribery.

In Australia, it has been possible to register a company with ASIC and conceal the real owners of the corporation. Research from 2012 found that Australian businesses that set up companies for others were near the top of such businesses globally in terms of being willing to set up an untraceable shell company even when there was a significant risk the company in question would be used for illicit purposes.

A 2022 study by the Stolen Asset Recovery Initiative of the World Bank and the UN Office on Drugs and Crime reported a UK business that established companies for international clients provided a front nominee for a UK shell company complete with a pre-signed but undated letter of resignation and a power of attorney agreement.

Thus, if necessary, the beneficial owner could fire the nominee retroactively. The nominee committed not to pursue legal action against the nominee for damages caused to the company or its assets. Beyond these arrangements, the nominee had no relationship with the beneficial owner or role in running the business. The UK business explained the role of the nominee was only to prevent the beneficial owner from having to reveal their control of the company.  

The Albanese Government ran a consultation on public disclosure of beneficial owners at the end of 2022. However, nothing further has been heard of progressing the initiative. The model put forward was extremely weak. It would require corporations to voluntarily disclose larger beneficial owners, which is unlikely to be complied with when the ultimate beneficial owner is a known criminal or corrupt politician. The government promised the model would be the first step and would be improved over time.

Subs disclosures good

The Australian Government has also legislated changes requiring all public companies in Australia to disclose all subsidiaries and the jurisdictions in which they are incorporated. This is a significant increase in transparency for Australian corporations as the previous requirement was to only disclose ‘material’ subsidiaries which is highly subjective. As new annual reports are published, it will be revealing to see some corporations report previously undisclosed subsidiaries.

The Albanese Government also promised to restrain the use of royalty payments by multinational enterprises, a very common form of profit shifting, but met with stiff international objections. The commitment has been abandoned, under the argument it will be addressed for larger corporations by the introduction for a minimum global tax rate of 15%.

Royalties still rorted

The recent loss of the Pepsi case by ATO, on appeal, at the Full Federal Court, makes a clear case for the need of reform of misuse of royalty payments. Multinational corporations consistently abuse royalty payments to shift profits offshore and avoid income tax in Australia and globally. It remains to be seen if the new global minimum tax rate will adequately address abuse of royalty payments.

In summary, while some progress has been made in Australia and globally to tackle tax dodging, it remains an enormous problem that disadvantages responsible businesses and undermines faith in public institutions.

In 2022, it was estimated that multinationals shifted US$1 trillion into tax havens, equivalent to over one-third of all profits booked outside headquarters countries. The impacts of multinational tax dodging are felt everywhere but especially devastating in the global south, with less enforcement capacity and greater reliance on corporate tax revenues.

We look forward to the Australian Government implementing all its pre-election promises to rein in multinational corporate tax avoidance and other corporate crimes.

Australia set to take on the cockroaches of multinational tax chicanery

This post was originally published on Michael West.

While Australian taxpayers are pouring $4.7B into the US submarine industrial base as part of the AUKUS deal, there is scant detail on how the money is spent. But Kevin Rudd has studied it closely. Or has he? Rex Patrick asks.

When Australia’s Ambassador to the United States and former Prime Minister Kevin Rudd did a radio interview about AUKUS with Hugh Hewitt, MWM thought it prudent to carefully analyse what was being said.

Australians have gifted $4.7B to the US to prop up and expand the US submarine industrial base so that the US might – and it’s a big might – be able increase their submarine build rate from 1.4 subs per year to 2.3.

The 2.3 is the magic number to ensure the US Navy is comfortable enough to transfer its much-needed submarines to the Royal Australian Navy while maintaining its own fleet capacity.

But to my knowledge, and I pay close attention to these things, there are no details in the public domain on how the Australian money will be spent; just lots of articles in New England papers saying their submarine shipyards are on a big recruitment drive. There are also press releases from local US politicians saying how happy they are with the inflow of cash into their shipyards.

So I was curious to hear Ambassador Rudd say:

“But when I look at the numbers – and we’ve done a big careful study of this, because we’re spending our money on this – there is already evidence of a full set of apprenticeship schools now emerging in Newport News, and in Groton, Connecticut. We see the increased throughput of boats going from only one per year to an average of 1.3, 1.4 per year.

So we have some confidence that, when you throw in the additional American investment and our [USD] $3 billion as Australia into the base, that by the time you get to 2028, 2029, we should be back in the territory producing two boats a year and perhaps even earlier.”

A “big careful study”. Wow! I had to get my hands on that. So, I put pen to paper and made an FOI request in the following terms: “I seek access to the study of the United States submarine industrial base referred to by Ambassador Kevin Rudd in his interview with Hugh Hewitt Show on the Salem Radio Network on 3 April 2024.”

After the usual wait, I received a formal decision, which left me stunned.

Not quite that big and careful

It turns out there is no study. Now, that’s not to say that Kevin was telling a porky pie. After all, he’s a former diplomat, twice Prime Minister and now ambassador. I’d attempt to explain how he didn’t lie, but it’s probably best if I just let the Washington Embassy do that.

Australian US Embassy FOI response.

So, there’s no consolidated, comprehensive study that underpins the commitment of billions of taxpayers’ dollars to the US shipyard industry.

I don’t doubt that our embassy in Washington and departments back in Canberra have examined various aspects of this, but the absence of a core analysis pulling together all aspects is quite remarkable.

Given that the initial political decisions on AUKUS, by both the Coalition and Labor, were taken without the benefit of such an assessment, it does look like there’s been a disinclination since then to look too closely at the deeply troubled state of US submarine construction projects.

I guess this all ties in with the revelation, extracted by Senator David Shoebridge at the last Senate Estimates, that there’s no clawback of our $4.7B if the US doesn’t deliver.

Tom and Demi

Defence’s management of AUKUS reminds me of that scene from the movie ‘A Few Good Men’ in which Demi Moore looks at Tom Cruise and offers caution: “My feeling is that if this [project] is handled in the same fast-food, slick-ass ‘Persian Bazaar’ manner with which you seem to handle everything else, something’s gonna get missed.”

The quote is spot on for our Defence Department and AUKUS, except that in ‘A Few Good Men’, Tom Cruise goes on to win his case. I’m pretty sure, on AUKUS, that’s not going to be the case for Australia.

Join our Team! AUKUS foreign expenditure sinkhole blows out to $12B … already

This post was originally published on Michael West.

The NSW casino regulator has beaten the casinos into submission, including mandatory cashless gambling measures. Meanwhile, the pokies clubs enjoy the freedom from the same regulations, making them a haven for money laundering. Whistleblower Troy Stolz with the story.

The legislation for pokie venues and the reporting requirements for the regulator AUSTRAC have been around since 2006, when the AML/CTF Act was passed. However, while cash is still legal tender in these clubs, the current regulation remains ineffective.

Going back to 2011, AUSTRAC identified the vulnerability of the gambling sector, where money laundering is concerned, stating that “Money laundering cases in the gaming sector generally involve cash proceeds from drug trafficking and fraud committed by domestic and international organised crime groups.”

To address this, the NSW Government established the NSW Independent Casino Commission as a result of multiple inquiries into the casinos. The casinos are now forced to mandate cashless gambling as well as having strict reporting requirements imposed, reducing their attractiveness as channels for money laundering significantly.

Not so for the pokie clubs.

Action from ALP on pokies, gambling, more long-shot than sure bet

NSW Crime Commission recommendations

According to the NSW Crime Commission, “criminals are funnelling billions of dollars of “dirty” cash through poker machines in pubs and clubs every year in NSW, but there are no effective controls or data collection to identify or prosecute those involved.”

Approximately $95 billion in cash flows through poker machines in pubs and clubs in NSW each year, making this the gambling capital of Australia.

In October 2022, the NSW Crime Commission delivered  the ‘Project Islington report‘, with a number of recommendations to address the issues known about for years.

The recommendations included the introduction of a mandatory cashless gaming card and enhanced data collection. According to Commissioner Michael Barnes, “poker machines offered criminals one of the last remaining safe havens where cash from criminal enterprises could be “cleaned” or gambled with virtual impunity. “At the moment, serious offenders can enter NSW pubs and clubs, sit down next to patrons in gaming rooms,

and openly feed large sums of cash from their crimes into poker machines with no real fear of detection.

NSW Crime Commission recommendations

So far, none of the recommendations have been acted upon by the NSW Government.

Instead, Premier Chris Minns established an Independent Panel on Gaming Reform. The Panel will oversee a cashless gaming trial on electronic gaming machines in a range of venues across NSW. The Panel has been operating in secret until it releases its report in November this year.

When it comes to compliance, enforcement and regulation, the special treatment of pubs and clubs by the NSW Premier is what NSW voters should be questioning. It is worth pointing out that thanks to pokies taxes, which are in the billions, the state government can reasonably be described as an accomplice of the predatory club casinos.

Big money, even bigger harm

According to the state budget, NSW will collect $3,466B in gambling tax this year. $2.474B of that is from club and pub pokies.

At the end of 2023, NSW had 87,545 poker machines in pubs and clubs, 895 more machines than at the end of 2022, despite a commitment from the NSW government to reduce the number of poker machines in the state.

According to Wesley Mission CEO Reverend Stu Cameron, the people of NSW lost $8.129B to poker machines in 2023, an increase of $29m on 2022 and

the equivalent of $1,000 for every adult and child in the state.

There are glimmers of hope, however, and Reverend Cameron says NSW has already seen a positive impact from reforms introduced by the NSW government in 2023, and the revenue from Clubs appears to be plateauing.

However, “we wait for the outcome of the current pre-implementation testing of cashless gambling in NSW; there are a range of reforms the government can introduce this year that will have an immediate impact on reducing harm.”

Let night harm

He also highlights the particular dangers of late-night gambling, “The government’s own research shows the increased danger of harm occurring to people gambling after midnight. We urge the government to act now on powering down poker machines between midnight and 10 am.”

This was backed up by the NSW Liquor and Gaming Authority in a study released in May 2023, stating that “The Impact of Electronic Gaming Machine (EGM) Late Night Play on EGM Player Behaviours study found that people with gambling problems represent the majority of late-night poker machine players, with almost two-thirds of people playing poker machines between 2 am and 8 am experiencing significant negative consequences.”

Vibrancy Reforms make a more vibrant pokies scene

Meanwhile, the Minns government has passed the Vibrancy Reform bill, which came into effect on July 1. The bill is set to improve the regulatory landscape for night-time economy operators. Welcomed by ClubNSW, the pokie clubs lobby group, it makes it easier for clubs to get approval to operate at all hours.

This has already led to later trading for pokie venues due to special events such as the Olympics overseas and by extending trading hours for pokie venues that have live music, meaning pokie venues are rewarded by having their pokies switched on for additional hours.

So the NSW Government, gambling minister David Harris and ‘Premier PokieMinns’ are now 14 months on from their own report stating “late night gambling is bad” on the premise of “bringing back live entertainment”, extending the pokie hours!

An earlier version of this article published on whistleblowers’ website thepublicinterest.com.

Gambling lobby’s influence in politics | The West Report

This post was originally published on Michael West.

In the wake of a scathing report into Child Protection by the NSW Auditor-General, the NSW Civil and Administrative Tribunal (NCAT) has consciously delayed well into next year the release of crucial child protection oversight documents. Rex Patrick reports on a government tribunal serving its masters.

I can comfortably say that I’m one of, if not the most, experienced Freedom of Information litigants in the country. I’ve had matters in the Federal Court (including the Full Court), the Administrative Appeals Tribunal, the South Australian and NSW Civil and Administrative Appeals Tribunal and with various Information Commissioners around the country.

I mostly win FOI cases, but not always. I react to the losses with quiet reflection, or an appeal. So, this article of criticism of NCAT is a little out of the ordinary, but justified.

Put it in the post please

My first strange experience with NCAT was when I tried to make an application for the review of a GIPA decision (the NSW equivalent of an FOI). Like I do in all other jurisdictions, I emailed my application to NCAT.

The response I got from the Registry was one of, sorry, we don’t accept applications or submissions, via email.

I was told to package my documents up and send them via Australia Post. It was like something straight out of the 1980s – and certainly a first deterrent to anyone under 50 in NSW that wants to challenge a Government decision.

Get a lawyer, really?

The next strange experience I had was when NCAT refused to let me represent (free of charge) ‘Sally’, a whistleblower who was then forced out of NSW Health System. 

Sally suffered with mental health issues following a complaint she made about corruption in the senior echelons of NSW Health. She FOI’ed the report generated in response to the her complaint and was refused access to it. She’d gone to NCAT to have the refusal independently reviewed and found herself up against a seasoned barrister representing NSW Health.

She asked me for help. I said yes. NCAT said no. They weren’t about to let me, a non-lawyer assist her. Principal Member Aaron Suthers, clearly oblivious to what someone has to pay have a lawyer to represent them in a complex FOI matter, suggested Sally hiring a lawyer was her best course of action.

Lawyers’ Picnic: NCAT fails to protect whistleblower in case against NSW Health

Sally withdrew her application. A later FOI showed that NSW Health’s costs for its legal team, paid for by the taxpayer, was $47,509.

(Source: FOI) Money paid to Clayton Ute to Resist Sally’s FOI

Smelling a rat

As a former senator I’m experienced at smelling a government rat. 

Hearing that NSW child protection was in total disarray, on May 20 this year I made a request for the Budget Estimates brief that had been used by the NSW Department of Justice and Community (DCJ) Deputy Secretary Simone Czech when she appeared before a NSW Legislative Council budget estimate committee in March. At the national level, I’ve successfully FOIed Senate Estimates briefs many times.

Just over two weeks later the NSW Auditor-General handed down a scathing report into the State’s Child Protection System. He found: 

“The NSW child protection system is inefficient, ineffective, and unsustainable. Since 2018–2019 there have been increasing child protection reports, escalating out of home care costs, insufficient placement options for children with complex needs, and limited services or support for children and families engaged in the child protection system. Despite numerous reviews into these issues, DCJ has failed to make the necessary changes to ensure its child protection service model meets the needs of children and families.”

Covering the cover-up

DCJ then responded to my FOI suggesting I couldn’t have the Estimates Brief because it’s a Cabinet Document (really, estimates briefs are sent to Cabinet?) and a document subject to Parliamentary privilege.

I was ready for the refusal. The document’s contents are no doubt ‘red hot’ and one they weren’t just going to hand them over.

With my application to NCAT for a review I included a detailed and forceful submission. That immediately caused DCJ to engage counsel and for the Premier’s Department to intervene in the proceedings. The NSW Information and Privacy Commissioner intervened as well, presumably to act as amicus curiae (a friend of the Tribunal).

Exemption farming

DCJ, the beneficiary of any delay in the release of the document, asked for the Cabinet exemption claim to be dealt with first, then the Parliamentary privilege issue to be dealt with at a later date.

I strongly objected, pointing out to the Tribunal that GIPA (FOI) primary purpose is to advance responsible government – where citizens get to have a say and to scrutinise and criticise the NSW Government – and that can’t be done with stale information. It’s quite normal for tribunals to deal with multiple exemptions at a time.

Despite my pleadings, Principal Member Kay Ransome acquiesced to the government’s request.

“I’m disappointed Principal Member”, I said. “The effect of this will mean this controversial documents will not see light of day until well into next year. The State thanks you”.

Refusal to enforce its orders

To wrap up my experience to date, there’s another matter before NCAT where, on no less than four separate occasions, the DCJ has failed to comply with NCAT’s orders to make a decision. But the Tribunal has just ignored the contempt … and the matter has gone on and on and on, unresolved.

When I raised a contempt application I was confronted with NCAT Deputy President, acting Judge Nancy Hennessy, who expressed doubt as to whether the Tribunal can even hold a Government Department in contempt and indicated the application I had made could result in an adverse cost order – I formally ask the Tribunal to enforce its orders against the Government and the prospect of me having to pay for the offender’s lawyers was raised.

What a remarkable state of affairs. I formally ask the Tribunal to enforce its orders against the Government and the prospect of costs gets raised.  

One would expect a recalcitrant agency to get a good thrashing, but not even a wet lettuce leaf is produced and the applicant who had the temerity to suggest that bureaucrats comply with the law is confronted at the outset with the risk of heavy financial cost. 

This post was originally published on Michael West.

Olympic-sized swimming pools and in-house baristas at private schools will continue to be financed by public subsidies after the Labor Government said a flat-no this week to calls to remove tax breaks on building funds. Morgan Harrington with this perspective.

Private school In 1962, St. Brigid’s Primary School in Goulburn needed a new toilet block. The school was overcrowded, with 84 students in a single kindergarten classroom.

Like all non-government schools at the time, it didn’t receive any public funding. It couldn’t afford the cost of building the toilets, which it needed to meet NSW Government heath requirements, so it shut, along with five other Catholic schools in the area. 

The 2,000 students were forced into a public school system with space for 640.

Although the “Goulburn Schools Strike,” as it came to be known, was not immediately successful, the election of the Menzie’s Coalition government in 1963 saw the Commonwealth begin to provide financial aid to non-government schools. 

A lot has changed since then.

“The recommendations to withdraw the Deductible Gift Recipient (DGR) status of building funds & for religious & ethics education in government schools is a direct attack on school & faith communities” https://t.co/8MfXGvYl4p

— Daniel Ang (@DanielAngRC) July 18, 2024

In the five years to 2022, private schools in NSW spent an estimated $1.5 billion on capital projects. Building funds, which parents are encouraged to donate to, are given the tax deductible status by the Commonwealth.

But, in a report released last week, The Australian Productivity Commission has called for these building funds to be stripped of their tax deductible status because there is a “material risk that donors could convert a tax‑deductible donation into private benefits.” 

The response from the Albanese Government has been swift and unequivocal. Andrew Leigh, the Assistant Minister for Competition, Charities and Treasury, has said that the proposed changes “are not being considered.” 

Despite the commentary, the proposal to remove the tax-deductible status of private school building funds is not ‘radical’. The expanding gap between our public and private schools epitomises Australia’s increasing inequality.

The solution is simple: the billion dollars in tax revenue foregone to private schools through their tax-deductible building funds could be redirected to improving schools that need it the most. How else will we ensure that all young Australians get a fair go?

…………….

Editor: The case to justify tax breaks for private school building is not a strong one. Here, Morgan Harrington and Alexia Adhikari reveal some of the more blatant vanity projects being subsidised by the public.

Private schools, public subsidies: with $50k fees per child per year, how can tax breaks be justified?

Over the nine years of Coalition government public funding was skewed towards the private school system to the relative disadvantage of public schools. This has given rise to an outcry over the injustice of cross subsidies. Although, here we break down how the system actually works – on a per student funding basis, which benefits new and smaller private schools and takes the burden off the public for school funding.

That said, the DGR subsidies to the wealthy private schools remains hard to justify, as even many advocates of the independent school system privately admit.

Cranbrook and the private school “arms race”. How far is elite school funding out of whack?

This post was originally published on Michael West.

Olympic-sized swimming pools and in-house baristas at private schools will continue to be financed by public subsidies after the Labor Government said a flat-no this week to calls to remove tax breaks on building funds. Morgan Harrington with this perspective.

Private school In 1962, St. Brigid’s Primary School in Goulburn needed a new toilet block. The school was overcrowded, with 84 students in a single kindergarten classroom.

Like all non-government schools at the time, it didn’t receive any public funding. It couldn’t afford the cost of building the toilets, which it needed to meet NSW Government heath requirements, so it shut, along with five other Catholic schools in the area. 

The 2,000 students were forced into a public school system with space for 640.

Although the “Goulburn Schools Strike,” as it came to be known, was not immediately successful, the election of the Menzie’s Coalition government in 1963 saw the Commonwealth begin to provide financial aid to non-government schools. 

A lot has changed since then.

“The recommendations to withdraw the Deductible Gift Recipient (DGR) status of building funds & for religious & ethics education in government schools is a direct attack on school & faith communities” https://t.co/8MfXGvYl4p

— Daniel Ang (@DanielAngRC) July 18, 2024

In the five years to 2022, private schools in NSW spent an estimated $1.5 billion on capital projects. Building funds, which parents are encouraged to donate to, are given the tax deductible status by the Commonwealth.

But, in a report released last week, The Australian Productivity Commission has called for these building funds to be stripped of their tax deductible status because there is a “material risk that donors could convert a tax‑deductible donation into private benefits.” 

The response from the Albanese Government has been swift and unequivocal. Andrew Leigh, the Assistant Minister for Competition, Charities and Treasury, has said that the proposed changes “are not being considered.” 

Despite the commentary, the proposal to remove the tax-deductible status of private school building funds is not ‘radical’. The expanding gap between our public and private schools epitomises Australia’s increasing inequality.

The solution is simple: the billion dollars in tax revenue foregone to private schools through their tax-deductible building funds could be redirected to improving schools that need it the most. How else will we ensure that all young Australians get a fair go?

…………….

Editor: The case to justify tax breaks for private school building is not a strong one. Here, Morgan Harrington and Alexia Adhikari reveal some of the more blatant vanity projects being subsidised by the public.

Private schools, public subsidies: with $50k fees per child per year, how can tax breaks be justified?

Over the nine years of Coalition government public funding was skewed towards the private school system to the relative disadvantage of public schools. This has given rise to an outcry over the injustice of cross subsidies. Although, here we break down how the system actually works – on a per student funding basis, which benefits new and smaller private schools and takes the burden off the public for school funding.

That said, the DGR subsidies to the wealthy private schools remains hard to justify, as even many advocates of the independent school system privately admit.

Cranbrook and the private school “arms race”. How far is elite school funding out of whack?

This post was originally published on Michael West.

The weapons company whose drones killed Australian aid worker Zomi Frankcom in Gaza has been washing taxpayers’ money into Israel by cheap loans and large dividend payments, on top of its related party payments for weapons contractors. Michael West reports.

Australia is effectively financing the genocide of Palestinians and the slaughter of foreign aid workers with public money.

MWM has analysed the past four years of financial statements for Elbit Systems of Australia Pty Ltd. This company is directly owned by Elbit Systems Ltd in Israel; it is the country’s largest weapons maker. Its drones were deployed in the precision missile strikes on the World Kitchen Central aid convoy in Gaza which killed 7 aid workers including Australian Zomi Frankcom.

Among the findings:

• Elbit’s Australian company board is stacked with Israeli Elbit executives
• Elbit Australia has paid almost $17 million in dividends to its Israel parent company over the past two years ($6.9m in 2023 and $10m in 2022).
• $1.5m was given to Elbit Australia last year in government grants ($1.3m in the year before)
• Last year, Elbit Australia made a loan of $3.5m to its parent company or a company controlled by its parent at interest rates of 4.77%. Home loan mortgages average more than 6% and business loans at least twice that.

These revelations come at a time when the ‘Binskin Inquiry’ report into the death of Zomi Frankcom is about to be made partially public. As the 100 day mark since the killing of Frankcom by the Israel Defence Forces (IDF) passed last week, a story was leaked to Guardian Australia which indicated that only part of the Binskin findings about “the incident” would be made public.

In another leak today to Rupert Murdoch’s pro-Israel The Australian, it was made clear that no fault would be laid at the feet of Israel for what was a ‘mistake’ in the fog of war.

This despite clear evidence of three separate missile attacks on a convoy of World Kitchen Central aid vehicles which were clearly marked.

The financial picture of Australia’s military and financial support for the regime of Benjamin Netanyahu is even bleaker when you consider that the government gave Elbit a $917m weapons contract earlier this year; and our sovereign wealth fund under Peter Costello, the Future Fund has become an investor in Elbit Systems.

Future Fund ducks for cover over war crimes investment in Elbit

The board of Elbit Systems Australia comprises Acting Chair Kym Osley who is ex-Air Force, Israeli Boaz Cohen the Senior Vice President Land Systems for Elbit Systems, Haim Delmare an Israeli 20 year veteran executive of parent group Elbit veteran, Joseph Gaspar the chief financial officer of parent Elbit Systems, Dr Karen Stanton the chair and defence industry advocate, Jaimie Hatcher – formerly of Defence now defence industry, and company director Roger Powell.

For a multinational company with revenues of $23m last year, down from $55m (they are likely to rise sharply this year since the Gaza campaign began last October) the dividends to the parent group in Israel are high – $6.9m last year and $10m in 2022.

After “marketing, innovation and bids proposals” expenses of $3.7m last year and general admin expenses of $2.7m and staff costs, they managed to eke out a profit of just 19k. So tax paid is negligible. It was $666k the year prior. The cashflow statement shows a $1.3m tax credit last year.

Elbit loan. Financial report 2023

And government grants?

What is particularly unusual however are the government grants and the related party loan. Why would Elbit Australia be lending money to its Nasdaq listed parent company in Israel? And why at an interest rate just marginally above the Reserve Bank cash rate at 4.35%?

Related party contract work is in the tens of millions of dollars each year, as is expected with these kind of operations and the company has also been claiming the R&D tax benefit.

Revenue peaked at $93m in 2021Rp contract work 21m in 2021

In the leak to The Australian today about the Binskin Inquiry report, “Australia/Israel & Jewish Affairs Council executive director Colin Rubenstein said he would not be surprised if Air Chief Marshal Binskin’s report confirmed that the IDF had “a robust system of investigating itself”, and that the IDF had “learned from the mistakes made in the air strike to ensure such an incident should never happen again”.

“The IDF is professional and moral, as many high-ranking officers from other Western defence forces have found after working with the IDF,” Dr Rubenstein said. “Tragic accidents do happen in war, regardless of who is fighting, but it is important to thoroughly investigate all the circumstances and take steps to do everything possible to ensure such accidents aren’t repeated, as the IDF’s independent investigation has done.”

McBride, Binskin and the Keystone Cops – culture of cover-ups now Zomi Frankcom investigation

This post was originally published on Michael West.

The Royal Commission has found three veteran deaths by suicide every fortnight, yet Stuart McCarthy says the situation with the Department of Veteran Affairs remains toxic with a ‘lawfare’ campaign against vulnerable veterans and their families.

MWM‘s investigation into corruption allegations aired in a Senate Estimates hearing two weeks ago reveals additional layers of a “toxic” veterans’ affairs bureaucracy, which has defied not one but two Royal Commissions.

At the heart of the controversy lies a long-running campaign of taxpayer-funded ‘lawfare’ against vulnerable military veterans, families and widows, with parallels to the Robodebt scandal, involving a 140 year old law firm whose influence is undermining “urgent” reforms to “not fit for purpose” legislation identified as a contributory factor in veteran suicide. As the Defence and Veteran Suicide Royal Commission’s (DVSRC) inquiry draws to a close, the situation is now so toxic the department’s security chief has labelled its critics as “security threats.”

Two weeks ago MWM covered revelations from a Senate Estimates hearing that the head of the Department of Veterans’ Affairs (DVA) veteran and family counselling service was the subject of “numerous” misconduct and corruption allegations, and in 2020 dismissed a misconduct complaint against herself “on behalf of the Minister.”

The hearing also revealed DVA’s head of security Rodger McNally was referred to the national intelligence watchdog for allegedly waging a “vendetta” against veterans and advocates who used freedom of information (FOI) laws to uncover “toxic” practices that have since been a focus of the DVSRC’s inquiry.

NACC: Veterans’ Affairs boss dismissed misconduct complaint against herself

During the Estimates hearing, Tasmanian Senator Jacqui Lambie also asked DVA Secretary Alison Frame:

“Do you know if there have been any referrals from the Royal Commission to investigative bodies with respect to DVA or any of the contractors that have been used in the past?”

To which Frame replied, “I’m not aware of any.”

Senator @JacquiLambie in FADT Estiimates on 2 July 2024 questioning @DVAAus:Secretary Alison Frame:

Lambie: “Do you know if there have been any referrals from @roycommDVSRC to investigative bodies with respect to DVA or any of the contractors that have been used in the past?”… pic.twitter.com/29TV2Ijess

— Stuart McCarthy (@StuartMcCarthy_) July 6, 2024

In response to a written query, an Australian Federal Police spokesperson told MWM “The AFP has not received any reports from the DVSRC.” However, multiple sources say DVA’s toxic, adversarial culture is largely driven by ‘lawfare’ by the 140 year old law firm Sparke Helmore, acting on behalf of the Commonwealth.

From 2016 to 2019 Sparke Helmore received $9.6 million to engage in lawfare against veterans making claims to DVA, including appeals that often escalate to the Administrative Appeals Tribunal (AAT).

The overall DVA process, described as “byzantine”, “archaic” and “not fit for purpose” by the DVSRC and a multitude of previous inquiries, has been identified as a contributory factor in veteran suicide.

An August 2018 letter from then Veterans’ Affairs Minister Darren Chester obtained by MWM says “DVA pays Sparke Helmore on a global basis for its services, and not on a per matter basis.”

MWM can also reveal that during the advocacy campaign to establish the DVSRC, Sparke Helmore lawyers were so deeply embedded in the DVA bureaucracy they were authorised by the DVA Secretary to make determinations about the releasability of departmental documents under the FOI Act.

Veterans treated as ‘security threats’

Several well known veteran advocates who lobbied for the DVSRC’s establishment using documents obtained through FOI are among those identified as “security threats” in a 695-page affidavit from McNally to the AAT, cited by Lambie in the Senate hearing two weeks ago. The affidavit was for an AAT matter in which DVA is seeking exemptions from FOI laws that require the names of senior public officials to be included without redaction when government documents are released.

A @SparkeHelmore lawyer, Molly Campbell, was parachuted into @DVAAus in the lead up to #VeteransRCNow Royal Commission. From 2016 to 2019 Sparke Helmore was paid $9.6 million to take on veterans struggling through a dysfunctional DVA bureaucracy.https://t.co/8GujWA2PRb pic.twitter.com/tfoBCLWKiH

— Stuart McCarthy (@StuartMcCarthy_) September 19, 2021

One of the DVA clients named by McNally as a “security threat” is a veteran with a traumatic brain injury and terminal Parkinson’s Disease.

The day after the Estimates hearing, Veterans’ Affairs Minister Matt Keogh tabled proposed legislative amendments to “simplify and harmonise” veterans’ entitlement laws, in response to the DVSRC’s first “urgent” interim recommendation two years ago. Keogh claims the “legislation has been developed in close collaboration with the defence and veteran community,” but his proposal was panned as a “band-aid bill.” Australian Peacekeeper and Peacemaker Veterans’ Association chair Ian Lindgren told MWM last month he quit Keogh’s “purported consultation process on day one”, because:

“The ‘simplified’ legislation will continue to create the angst, complexity and trauma which contributes to suicidality in the defence and veteran community.”

“Give up and die”

Several sources have told MWM that Sparke Helmore lawyers are among those advising DVA officials on the drafting of Keogh’s Veterans’ Entitlements, Treatment and Support Bill. The Bill proposes to retain the most complex and onerous of the current “byzantine” acts, and excise the veterans rehabilitation and compensation system from legal standards and oversight mechanisms applicable to other Commonwealth workplace safety and compensation schemes. Veteran advocates say this is a green light for continued lawfare against vulnerable, seriously ill veterans. One advocate says:

“This is just a continuation of the bureaucratic meat grinder by rich men in suits sucking on the public teat while our mates give up and die.”

In May last year the DVSRC commissioners wrote to Prime Minister Anthony Albanese seeking a 12-month extension to their inquiry “in the hope that we could complete the most thorough inquiry possible … to induce action.” Albanese declined the request three months later. An anonymous spokesperson for Attorney-General Mark Dreyfus told The Guardian three months later that the government was instead “committed to finalising this inquiry promptly so we can save lives and ensure a better future for our defence and veteran communities.”

Shades of Robodebt

But the veterans affairs lawfare controversy actually predates the current Royal Commission, with senior government officials having defied the directions of a previous Royal Commission almost a decade ago. The scandal runs deeper than the dysfunctional legislation, into unlawful conduct and impunity that has parallels with the notorious Robodebt scheme.

In June 2016 DVA Assistant Secretary Neil Bayles was grilled by the Royal Commission into Institutional Responses to Child Sexual Abuse, over the department’s use of arbitrary standards of evidence for determining rehabilitation and compensation claims from former defence force personnel who were subjected to sexual abuse. Under the relevant laws, claimants are required to meet the “balance of probabilities” standard of proof, but DVA’s nightmarishly bureaucratic claims procedures impose additional, arbitrary legal tests that the head of that Royal Commission said have no basis in law, including a requirement for “corroborative evidence.”

Child Sexual Abuse Royal Commission chair Justice Peter McClellan said to Bayles during the proceedings:

“What you should take back to [the department and government] is advice that a system which is operating on the balance of probabilities but excludes any possibility of succeeding in a claim unless there is corroborative evidence, is not in accordance with the law.”

The Marty Rollins case

Two years after that hearing, and still with no sign of change to DVA’s practices, came an ABC 7.30 Report segment which did finally trigger significant change in the department. Former soldier Martin Rollins, who suffered debilitating spinal injuries in a 1990 training accident, told his story about the decade long campaign of DVA “bureaucratic bastardry” to defeat his claims for economic loss compensation.

The department spent more than $600,000 on legal fees to fight Rollins, then literally deleted the relevant policy without telling him or his lawyer, before finally offering him $127,000 for “defective administration.”

Rollins’ story resulted in a personal apology to Rollins from the DVA Secretary and an apology in Parliament from Senator Marise Payne on behalf of the Veterans’ Affairs Minister. Investigations by the Secretary and her senior legal advisor into Rollins’ mistreatment led to an Australian Public Service Code of Conduct investigation into McNally and verbal acknowledgments from senior DVA officials that the conduct of McNally’s security section was “no doubt a driver of veteran suicidality.”

A DVA “client liaison unit” for managing up to 170 allegedly “unreasonable” clients was closed and its bureaucratic architecture was dismantled. Major internal and external reviews were undertaken, and Rollins was at one point invited by DVA to help implement the recommendations of those reviews.

On rare occasions, injured/disabled #veterans who survive this utter bastardry & fight for effective political advocacy and/or media support, have managed to secure hollow, mealy-mouthed government ‘apologies’ in Parliament, for example this offering from Sen. @MarisePayne. 12/25 pic.twitter.com/1KbUXs5ISQ

— Stuart McCarthy (@StuartMcCarthy_) April 16, 2022

MWM is aware of at least several cases of DVA clients managed by the “client liaison unit” who subsequently died by apparent suicide. In one of these cases, MWM can now reveal that on 27 January 2022, the other DVA official named by Lambie last week wrote to the spouse of a seriously ill veteran, threatening to impose “restrictions on your methods for contacting DVA” as part of a “communications plan.”

This was standard DVA phrasing for individuals whose cases were being diverted to the “client liaison unit,” using the tone of a headmistress threatening a primary school student with detention for swearing in the playground. The veteran died four months ago. MWM understands that the state coroner is yet to determine a cause of death. Documents obtained by MWM also show that Sparke Helmore is representing the Commonwealth in an appeal to the AAT by the deceased veteran’s widow.

The department has not responded to our detailed queries regarding the involvement of McNally or the other senior DVA official in this or similar cases involving the client liaison unit.

Two months after Rollins’ story aired in 2018 and as the public lobbying campaign towards the DVSRC gained public support, former military lawyer and prominent veterans’ advocate Glenn Kolomeitz told 2GB’s Ben Fordham after attending a round table meeting with senior DVA officials:

“We’ve resolved a whole bunch of the big-ticket issues and I walked away from there really confident that DVA is getting on with the job.”

But eight years on from Bayles’ appearance at the Child Sexual Abuse Royal Commission and two months before the end of the current DVSRC, those initially promising reform efforts seem to have stalled or gone into reverse.

Blatant cronyism

The evidence standards in the department’s policy guidelines still haven’t been corrected. A six-year, billion-dollar PWC/DVA window-dressing exercise called “veteran centric reform” rolled out to forestall the DVSRC became a magnet for blatant cronyism and corruption. One of the key objectives of this billion-dollar program was to “improve the department’s ability to support vulnerable clients.”

In reality, many vulnerable veterans and their families appear to have fallen victim to continued corruption.

Having rejected calls to extend the DVSRC, senior Albanese government officials now argue in private that the “band-aid” Bill tabled in Parliament two weeks ago is the best they have to offer because it would be “too expensive” to undertake the kind of fundamental legislative reform actually recommended by the DVSRC and actually required to meet the needs of veterans vulnerable to suicide.

One of Australia’s most successful veteran advocates, Rod Thompson, who has represented hundreds of survivors of defence force abuse over the past 15 years, says the existing Act retained in Keogh’s Bill “is a basket case”, and if the new legislation is passed:

“I think it’s going to get worse, because there will have to be another set of precedents and case law.”

The Brisbane-based former Navy Leading Seaman says he has a 90% success rate in appeals against DVA determinations to the Veterans Review Board – which prohibits representation of veterans by lawyers but typically involves cases prepared for DVA by taxpayer-funded lawyers – and an 85% success rate at the AAT.

He says he still occasionally deals with Sparke Helmore lawyers representing the Commonwealth in AAT matters. His success rate alone poses serious questions about the justice afforded to injured veterans under the department’s “not fit for purpose” system.

More Helmore hell

Several sources have told MWM that since the 2022 change in government and recent senior DVA leadership staff turnover, including the appointment of departmental secretary Alison Frame in January last year, Sparke Helmore has returned to a position of influence in the department. This includes involvement in the “legislative reforms” tabled by Keogh two weeks ago. One source says:

“Exactly the same shit is happening all over again … the fox is back in charge of the hen house. And it’s happening in the middle of a Royal Commission.”

With an impotent national corruption watchdog, a bipartisan commitment to maintaining the status quo despite clear directions from two Royal Commissions in less than a decade, and mounting evidence of systemic corruption in this dysfunctional portfolio, the defence and veterans community is left wondering what it will take short of criminal corruption charges to generate the political will for real change rather than band-aids.

This post was originally published on Michael West.

Richard Marles and Penny Wong deny Australia is aiding Israel’s slaughter of the Palestinians but they are dissembling over military exports with Orwellian language. Michelle Fahy for Declassified Australia reports on ‘non-lethal’ weapons parts.

‘Lethal’ is the first word Lockheed Martin uses to describe and market its F-35 fighter jet as “the most lethal fighter jet in the world”. In March this year, the F-35A version was also operationally certified to carry a nuclear bomb – the first fighter jet or bomber granted nuclear-capable status since the 1990s.

Lockheed Martin has acknowledged that “every F-35 built contains some Australian parts and components”, a number of which Australia is also the sole source. The F-35 would not operate without all its parts and components.

According  to the UN: “The scale of human death and destruction wrought by Israel’s bombing of Gaza (since October 7) … has been immense.”

Client State: Australia the “51st state of the US” for deadly weapons production

Government in damage control

Up until a few weeks ago, ministers were still trying to maintain the line that “Australia is not sending weapons to Israel and has not done so for the past five years.”

On ABC radio in early June, Defence Minister Richard Marles said: “What the Greens are alleging is that somehow we are supplying Israel with weapons which are being used in the conflict in Gaza. That is absolutely false, and … a total lie.”

But after nine months of denying weapons are going to Israel, senior ministers are in damage control after a Defence Department official admitted for the first time since the Hamas attack on Israel that there are

active export permits relating to Israel that cover the transfer of parts and components.

Senior ministers have now introduced an Orwellian phrase—“non-lethal parts”—to defend the continued export of key parts and components into the F-35 supply chain. The government was forced to change its language following evidence given by a Department official in a recent Senate Estimates hearing.

Hugh Jeffrey, a deputy secretary, told Estimates that “around 66” defence export permits “that relate to Israel” remain active. A proportion of them related to Australian Defence Force capability, he said.

“The remaining elements of those permits range from parts and components to technology exports,” Jeffrey said. The Defence Department had finally admitted that it has active permits relating to Israel that cover the export of parts and components.

Foreign Minister Penny Wong was forced to concede that Australia was exporting parts into the F-35 global supply chain but then doubled down. She told ABC Insiders on 16 June: “We have F-35s… we are part of 18 nations who are part of that consortia. We are involved in non-lethal parts…”

Five days earlier, Richard Marles had said: “There are a number of what I’d describe as non-lethal parts that are provided to the F-35s.”

‘Non-lethal parts’ disinformation

The UN Arms Trade Treaty (ATT) makes no mention of the lethality of the individual parts or components that comprise the weapons (“conventional arms”) it covers.

The ‘non-lethal parts’ messaging is also directly at odds with a UN statement issued on 20 June that named multinational arms companies in its call to cease supplying Israel with arms, “even if [the arms transfers] are executed under existing export licenses.”

Under the headline “States and companies must end arms transfers to Israel immediately or risk responsibility for human rights violations”, the statement named 11 multinationals, including Lockheed Martin, BAE Systems, Boeing, Northrop Grumman, Rheinmetall and RTX/Raytheon, which all have significant operations in Australia.

The UN statement said, “These companies, by sending weapons, parts, components, and ammunition to Israeli forces,

risk being complicit in serious violations of international human rights and international humanitarian laws.

What’s a weapon?

The favoured line of all MPs – that “Australia is not sending weapons to Israel and has not done so for the past five years” – has finally fallen apart. The carefully crafted line contained two elements designed to mislead: ‘weapons’ and ‘to Israel’.

The government is cynically relying on a narrow military definition. The department’s Hugh Jeffrey has said its chosen definition “derived from” definitions in the Arms Trade Treaty. “Under the UN definition, weapons are defined as whole systems, like armoured vehicles, tanks and combat helicopters,” he said.

However, the Arms Trade Treaty does not use the word “weapons” as implied by Jeffrey; it uses the term “conventional arms”. Article 2 of the treaty says that it applies to “all conventional arms within the following categories:”

• Battle tanks
• Armoured combat vehicles
• Large calibre artillery systems
• Combat aircraft
• Attack helicopters
• Warships
• Missiles and missile launchers
• Small arms and light weapons

Article 3 refers to ‘ammunition/munitions’, and Article 4 refers to ‘parts and components’. These military products are also included under the treaty’s prohibitions, meaning their export must cease if they are being used in serious violations of international law.

In all its previous public statements, the Albanese government had ignored Articles 3 and 4.

The Defence Department also continues to insist that parts and components are not weapons.

To Israel or not?

Military exports – including ammunition, munitions, parts and components – do not need to travel directly ‘to Israel’ to be prohibited under the ATT. On the contrary, Governments are required to find out where their weapons will or may end up and then make decisions that comply with the treaty.

Using arms trade lingo, a government must consider and assess the potential ‘end users’ of its military exports.

The Arms Trade Treaty and the Geneva Conventions are clear on human rights responsibilities. Article 6.3 states that a nation-state should not authorise any transfer of conventional arms if it knows at the time that the items would be used in the commission of genocide, crimes against humanity, grave breaches of the Geneva Conventions of 1949, or other war crimes.

Article 7.1 states that the exporting nation must assess the potential for conventional arms to commit or facilitate a serious violation of international humanitarian law or international human rights law.

Article 7.4 adds that this requirement also includes ammunition, munitions, parts and components.

The UN experts also referred to the Geneva Conventions when warning countries that any transfer of weapons or ammunition to Israel that would be used in Gaza was likely to violate international humanitarian law:

“States must accordingly refrain from transferring any weapon or ammunition – or parts for them – if it is expected … that they would be used to violate international law … Such transfers are prohibited even if the exporting State does not intend the arms to be used in violation of the law … as long as there is a clear risk.”

This story an edited version of the story first published by Declassified Australia.

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This post was originally published on Michael West.